Mega.co.nz, the cloud storage company founded by Kim Dotcom, has failed in its bid to go public via a backdoor listing on the New Zealand stock exchange. While conceding that the news is a disappointment, CEO Graham Gaylard informs TorrentFreak that it is not viewed as a setback for Mega.

During the first quarter of 2014, cloud-storage service Mega.co.nz announced its intention to hit the New Zealand stock exchange.

After being launched by Megaupload founder Kim Dotcom just a year earlier, the news was well received. However, in keeping with the complex life of the entrepreneur, the mission would not be straightforward.

In a process that began last March, Mega said it would aim for a backdoor listing on the New Zealand stock exchange via a reverse takeover of an existing company, TRS Investments.

In tandem, TRS said it had reached agreement to buy Mega Ltd through a share issue to Mega shareholders. Documents filed with the stock exchange put Mega’s value at NZ$210 million (US$155.7m).

Once the acquisition had been completed TRS planned to change its name to Mega but after several delays in previous months it became evident this morning that the deal would not be going ahead.

“As previously advised to the market, the proposed acquisition of Mega was conditional upon shareholder approval being obtained on or before 29 May 2015. It has become evident that this condition will not be satisfied within this time frame,” TRS said in a notice to the market.

“TRS has been advised overnight by Mega that the shareholders of Mega will not agree to an extension of the conditional date. As a consequence it will be the case that on 29 May, the conditions to the acquisition will not be satisfied, the share sale deed entered into between TRS and the Mega shareholders will terminate, and the proposed acquisition of Mega will not proceed.”

Speaking with TorrentFreak, Mega CEO Graham Gaylard acknowledged the development as a disappointment but insisted that the company had not been disadvantaged as a result.

“It’s disappointing that we could not make it work, given the amount of time and effort that Mega put into the transaction, but it is not seen as a setback for Mega. The company continues on as a private company,” Gaylard said.

The Mega CEO also confirmed that the company wouldn’t give up on its stock market aspirations.

“An exchange listing is definitely still on the horizon, but plans for this have not been worked on,” he said.

In the meantime Mega continues to grow. Gaylard informs TF that the company now has 18 million registered users, with an additional one million users signing up every month. The majority are on the company’s extremely generous free tier, so the challenge moving forward will be to upgrade as many as possible to premium subscription status.

That has not been without difficulty, however. While feedback from Mega’s customers is generally positive, action taken against the site in the United States has proved somewhat of a hindrance.

According to Mega, Senator Patrick Leahy put payment processors under pressure to stop providing services to certain file-hosting companies listed in a Netnames report published last year.

Following Leahy’s intervention, Visa and MasterCard then pressured PayPal to cease providing payment processing services to Mega, ostensibly on the basis that since content on Mega is encrypted, no one can confirm whether it is legitimate or not.

Following a period in which Mega could accept no payments, it is now able to do so through resellers. It’s a less than ideal situation but considering the levels of service offered by the company, it will be one that it hopes customers will take in their stride.